Question: QUESTION 24 (4 marks) Using 2018 as the base year, calculate the rate of inflation for the Laspeyres Price index and the Paasche Price Index.

QUESTION 24 (4 marks) Using 2018 as the base year, calculate the rate of inflation for the Laspeyres Price index and the Paasche Price Index. A. The rate of inflation for the Laspeyres Price Index and the Paasche Price Index are 130.13% and 127.34% respectively. B. The rate of inflation for the Laspeyres Price Index and the Paasche Price Index are 27.34% and 30.13% respectively. C. The rate of inflation for the Laspeyres Price Index and the Paasche Price Index are 127.34% and 130.13% respectively. D. The rate of inflation for the Laspeyres Price Index and the Paasche Price Index are 30.13% and 27.34% respectively.

QUESTION 25 (4 marks) Which of the following statements is patently incorrect? A. Between 2018 and 2021, the prices of the 4 commodities rose faster than their levels of consumption. B. In real terms, the price inflation of the 4 commodities between 2018 and 2021 was probably greater than 27.3% but less than 30.1%. C. The weighted price changes are positively correlated with the weighted quantity changes during the 2018 -2021 period. D. That the Laspeyres indices exceed the Paasche indices is indicative of the substitution effect at play between 2018 and 2021.

QUESTION 24 (4 mar Using 2018 as the base year, calculate the rate of inflabion for fhe Laspeyres Price index and the Pascche Price index. A. The rate of inflafon for the Laspeyres Price Index and the Passche Price Index are 130.13\% and 127.34% respectively. 8. The rate of inflafion for the Laspeyres Price Index and the Passche Price Index are 27.34\% and 30.13% respectively- C. The rate of infation for the Laspeyres Price Index and the Passche Price Index are 127.34% and 130.13% respectively. D. The rate of inflaton for the Laspeyres Price Index and the Passche Price Index are 30.13% and 27.34% respectively- QUESTION 25 (4mar Which of the folowing statements is patently incorrect? A. Between 2018 and 2021 , the prices of the 4 commodties rose faster than their levels of consumption. B. In real terms, the price inflation of the 4 commodties between 2018 and 2021 was probably greater than 27.3% but less than 30.1%. C. The weighted price changes are postively correlated with the weighted quantity changes during the 2018 2021 period. D. That the Laspeyres indices exceed the Passche indices is indicative of the substtufion effect at play between 2018 and 2021

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